Three Phases of Globalization


Phase 1: The Early Voyages of Exploration & Colonization

 Phase one begins in 1492, with the voyage of Christopher Columbus to the new world, and continues with later European voyages of exploration that  eventually made possible the formation of Europe’s colonial empires.  Who were these explorers, and why were their voyages unlike passages across  oceans that were made during the prehistoric period, true forerunners   of what we call globalization?

 The Italian explorer Christopher Columbus, financed by the Spanish crown, completed four voyages across the Atlantic Ocean that created a European awareness of the North and South American continents. The Portuguese explorer Vasco DA Gama was the first to lead a maritime expedition to India in 1498.  The conquistador Hernan Cortes brought much of Mexico under Spanish control  in the early 16th century. Ferdinand Magellan completed the first circumnavigation of the world between  1519 and 1522 in the service of King Charles I of Spain. Sir Francis Drake achieved the second circumnavigation of the Earth in the  late 16th century, and played the role of a global buccaneer, carrying out attacks and confiscating foreign treasures around the world. These adventurers were globalized for three reasons.

First, they engaged in the state-sponsored acquisition of strategically significant knowledge that enabled nations such as England and Spain to establish colonial empires across the globe.
Second, they carried out state-sponsored expeditions to confiscate wealth that could become the property of the state, thereby  anticipating future alliances between states and private companies.

Third, state sponsorship of global trading monopolies was a foreshadowing of state-sponsored national champion global corporations of the modern era. The monopoly of trade granted to the East India Company by Queen Elizabeth

 I in 1600 is a prime example of the state-corporate partnership that today  takes the form of the state capitalism practiced on the large scale by China, and by many other countries. At the same time, the East India Company was the great progenitor of the modern multinational corporation that benefits from the protections  provided by the nation state The limited liability it offered to its shareholders promoted the   development of investment capital by limiting the financial risk undertaken by their investors.

 Today’s global economy confirms the importance of this show pieceenterprise of the first phase of globalization. State-controlled companies are thriving and have enormous influence   in emerging economies, such as those of China, Brazil, and India. These state-owned enterprises can also become monopolies in their own right, along the lines intended once upon a time by the imperial monarch of the 16th century.

Phase 2: The Age of Transnational Integration

The second phase of globalization covers the period of intensive internationalization of transportation systems, communications, commerce, science, and many other human activities that unfolded between the middle of the 19th century and the collapse of second phase globalization that resulted from the outbreak of war in August of 1914. During the second half of the 19th century, the Western world experienced a dramatic intensification of international connectivity due to four advancing technologies–trains, steamships, the telegraph, and the postal system. These developments transformed people’s expectations of what was possible in much the same way that today’s electronic communications have shaped our own expectations of what the 21st century has to offer us.

As early as the 1830s, the arrival of a letter from far away could inspire a sense of wonder in the recipient. By the 1860s, transatlantic telegraphy provoked utopian and sometimes hysterical expressions of joy in the expectation that instant communications would put an end to the scourge of war.

The period 1880 to 1914 saw a level of global economic integration that matched or even exceeded that of the global economy today. The investment capital that flowed around the world, much of it originating in London, contributed to the economic development of the former colonies of the global British Empire–the United States, Canada, Australia, and New Zealand. Small and remote British possessions around the world, such as the Cayman Islands, the Bahamas, and Hong Kong, would eventually turn into so-called offshore tax havens, serving a global economic elite. Many of these subordinate micro states remain under British control to this day.

Other European colonial empires established their own international trade routes with their colonies in Africa, whose liberation’s would not come until the last decades of the 20th century. In fact, the oppression and exploitation of colonized populations have always been an integral part of the global system. Raw materials and more exotic goods flowed from the colonies across the seas to Europe.

At the turn of the 20th century, an affluent inhabitant of London had access to many products of foreign origin years before the fateful events of August 1914 profoundly disrupted this world of unprecedented global connectivity. The second half of the 19th century also saw an extraordinary proliferation of transnational organizations, many of which aimed at improving the world in one way or another by promulgating humanitarian ideals or a belief in the value of knowledge to human affairs. We may call these organizations and their global campaigns or movements the idealistic internationalisms.

The Swiss businessman and social activist Henri Dunant founded the Red Cross in 1863. The Salvation Army, a Christian international charitable organization, established in 1865. And the world’s only surviving language movement of this era, Esperanto, appeared in 1887.Surrounded by Poland’s language barriers and ethnic conflicts, LudwigZamenhof invented the artificial language known as Esperanto in  the hope of making peace among the warring factions. the French nobleman Pierre de Coubertin, an admirer of the British sport system, founded the International Olympic Committee in 1894 with the goal of establishing better international relations among the competing nations.

The Swedish industrialist Alfred Nobel began awarding the Nobel Prizes in1901 to scientists from any country. The professed internationalist and openly racist Lord Baden-Powell established the Scouting Movement in 1908. It is worth noting that all of these second phase international organizations, with the partial exception of Esperanto, have enjoyed enormously successful global careers over the past century or more. They were and they remain today exemplars of second phase globalization.

Having demonstrated their usefulness, or at least their widespread appeal to the global community, these global organizations testify to the enduring stature of venerable movements that have always claimed to represent the highest aspirations of mankind.Perhaps some of these humanitarian activists realized at the time that without the practical internationalism of the Universal Postal Union,established in 1874, as well as the services of the trans Atlantic steamship companies, their idealistic projects would have faced insuperable obstacles.

Phase 3: The Modern Age of Globalization

The third phase of globalization that began in 1945 was made possible by the long economic expansion that followed the end of the Second World War. New global economic reforms agreed upon by the United States and its wartime allies in 1944 provided a new framework for international commerce and finance.

The period from the late 1940s to the early 1970s has been called the Golden Age of Capitalism, this new global economic order, aimed at preventing a return of the catastrophic economic conditions that had brought on the Great Depression of the 1930s. The political implications of this new global economic order were and remain profound. This international arrangement called for close cooperation between nation-states, as opposed to the destructive economic competitions between nations of the 1930s. New international financial agreements and institutions, such as the International Monetary Fund and the World Bank, provided a new kind of global financial stability. states were empowered to set their own economic policies, including setting levels of taxation that were very high by today’s standards. States had the power to tightly regulate capital flows across national borders, thereby limiting the potentially destructive influence of foreign speculative investors.

Far more than is the case today, politicians were able to maintain a significant degree of control over the banking sector.Today, by contrast, the banking sector has demonstrated that it has the power to challenge the economic authority of nation-states to an unprecedented degree. Finally, this new global economic arrangement made possible the expansion of the welfare state and the protections it provides to the economically vulnerable as well as to more financially secure citizens who may face illness or unemployment. The expansion of the welfare state has been made possible by government regulation that created a balance of power between governments, large corporations, and the financial sector. This strategic balance allowed governments to create social arrangements, such as the advanced welfare state.

 The Golden Age of Capitalism ended during the early 1970s. It has been succeeded by slower growth and a series of global financial crises related to the triumph of neoliberal market globalism.This political and economic arrangement is based upon a deregulation of the corporate sector, the privatization of public enterprises and institutions, tax reductions for businesses and individuals, the setting of limits on the powers of labor unions, reducing the role of government in the formulation of social policies, and deregulating capital flows in the new global investment markets. These developments have coincided with the flourishing of unregulated offshore financial institutions and shell company strategies, some of them legal, others illegal, they have facilitated massive tax evasion by therich and embezzlement from the poor. These financial schemes retard social development in developed and undeveloped countries alike by removing trillions of dollars from the societies that need them to promote social development.

Post-war globalization after 1945 has also produced a global political dimension apart from the political forces that have promoted neo-liberal policies. The founding in 1945 of the United Nations, the successor to the League of Nations that had failed during the 1930s, marked a renewal of the idealistic internationalism that flourished prior to the first World War. The United Nations embodies hopes for effective global governance and regulations that remain largely unfulfilled.

The emergence during the postwar period of many Non-Governmental Organizations, or NGOs, has been a response to the limitations of international institutions, such as the United Nations. NGOs also respond to the fact that many nation-states are unwilling or unable to formulate or carry out a variety of important humanitarian and environmental projects.

For this reason, the globalization of our own era includes NGOs, such as Human Rights Watch, Amnesty International, Transparency International, and Greenpeace, among many others. NGOs are modern examples of idealistic internationalism, and their missions mind us that today’s globalization can be defined to include global responsibilities to poor and vulnerable people as well as to the endangered planet we all inhabit.

Source: University of Austin Texas,



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